Sunday, July 25, 2010

Markets traded with mixed to positive bias for the last week amid mixed set of fundamental data flow and positive corporate results. The action remained out of the index and select midcaps rallied as market breadth remained flat. Metals, Banking, Telecom and Capital Goods did well while IT and Financials saw some selling. It was a week which saw stock specific performances from all sectors. The top gainers among Nifty stocks included Ambuja Cement, GAIL, Tata Steel, Idea, Sterlite, Bharti and Hindalco while Dr Reddy, ABB and BPCL were among the top losers.

The cues from global markets are positive this morning and our markets back home are looking promising going ahead. Last couple of weeks witnessed a smart consolidation in the major indices followed by a strong breakout on Thursday keeping the chances alive for a strong rally going ahead. 17800 on Sensex and 5340 on Nifty are crucial support levels to keep the positive tone intact for initial target objectives of 20000 and 6000 respectively. Maintain stoploss below the said levels and continue to hold long.

Sunday, July 18, 2010

Markets traded with positive bias for the last week with corporate numbers let the markets alive despite weakness in global markets. Infosys came with encouraging guidance for the year though profits for the quarter stayed below expectations. TCS results enthused the markets and the stock responded sharply. Banking sector came out of the range bound trading and many stocks in the sector broke out to record their respective yearly/all time highs. Oil and Gas stocks corrected sharply after moving up substantially during the past many weeks. Realty stocks staged a strong bounce back as metals, technology and Pharma stocks were trading mixed. Unitech, Tata Motors, TCS, DLF, Axis Bank and IDFC were among the major gainers while BPCL, GAIL, M&M, RCom and Infosys were among the major Nifty losers.

The global cues are weak going into the next week and as indications come in we might see a gap down opening. Markets look set for a strong rally even from these levels despite weakness elsewhere. Markets are holding near the crucial resistance of 5400 which shows the resilience. On the upside the target on Nifty may extend to 6000 during the coming 6 months with 5240 as support. A breach below 5200 may drift the markets down towards 4800. It is going to be stock pickers’ markets going further and hence one must look for buying opportunities on corrections in specific stocks.

Sunday, July 11, 2010

Both Sensex and Nifty inched up 2% over the week to close near the highs once again. Telecom stocks took a giant leap after months of underperformance and figured among the major gainers for the week. It was a secular run and all sectors participated in the rally amid positive market breadth. In F&O segment 4 stocks gained for every one stock lost and the rises came despite weakness in the global markets. That shows the strength Indian markets are depicting. Bharti, Idea, M&M, BPCL, DLF and Infosys were the top gainers while ACC, Reliance Infra, JP Associates and NTPC figured among the losers.

The first quarter results are round the corner and start pouring in from here on. All indications suggest a strong quarter and our markets will react positively to the numbers. IMF revised the GDP growth forecast for India and this gave a strong boost to the markets. The long term fundamentals are extremely strong for India and therefore sharp corrections should be utilized to buy the markets. In the immediate term Nifty finds resistance at 5400 and if it manages to close above this level, we may see strong rallies ahead. We expect markets to find resistance at 5400 and correct below 5000. A fall below 5240 confirms the corrective tone. Trade Stock specific with strict stoplosses and target objectives.

Sunday, July 4, 2010

As predicted midcap and small cap stocks were in lime light while both Sensex and Nifty lost less than a percentage week on week. Markets were trading range bound with weak bias amid mixed global clues. PSU Oil Refining and Marketing companies were the major gainers during the week after the announcement of deregulation of fuel prices. BPCL, IDFC, Reliance Power and ONGC were the top Nifty gainers while Cairn, GAIL, Jindal Steel, Sterlite, Hindalco and Tata Steel were among the major losers.

The global markets are mixed and we can expect a flat opening in our markets. The global markets don’t look too rosy as the economic data emanating from US and Euro Zone doesn’t give any hopes of a sharp revival. The Euro Zone financial crisis shall escalate and percolate to other Euro Nations with high public debt to GDP ratio and ultimately clouding the sentiments over the structure of the currency and financial markets. The overall situation is that of uncertainty and in all probability India will emerge as a stronger nation.

5200 on Nifty is a strong near term support and breach of this level shall pave the way for a steep fall towards 5000 in the coming couple of weeks. A strong correction is long overdue and the quarterly results may well be the trigger. On the upside 5400 is a major resistance. Markets will find resistance near 5400 and may correct below 5000 with the possibilities of the fall being extended to 4600 remaining open.

Exit all long positions and traders are recommended to remain short on Nifty at every rise with an overall stoploss of 5400.